Bernanke hits back at critics of bond-buying plan
WASHINGTON – Ben Bernanke is seeking to defuse criticism of the Fed's $600 billion bond-purchase plan by arguing that it's needed to boost the economy and reduce unemployment. But he warns the can't succeed on its own.In a speech prepared for delivery on Friday, Bernanke makes his most forceful case to date that Congress also must provide more stimulus aid.Without more stimulus, high unemployment could persist for years, he says in the speech, his first since the Fed announced the program Nov. 3. But in making that argument, Bernanke risks heightening complaints that he's plunging the Fed into partisan politics.
Mr. Bernanke says that "Without more stimulus, high unemployment could persist for years." We've been told that if the economy were to miraculously recover this month and start adding 240,000 jobs per month, it would take years, (ten years?) to get the unemployment numbers back down the 7% range.
The question Mr. Bernanke, is how long will high unemployment persist after you have spent another $600 billion followed by possibly yet another $600 billion. Exactly what is it that we'll be getting for our possible $1.2 trillion investment above and beyond what we have kited checks for already? I don't think a clear answer will be forthcoming.
Mr. Bernanke is going to have to do a better job of selling QE II.